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TMI Blog2005 (5) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... After the Notification of the final findings was issued on 4-2-2003 in which the Designated Authority came to the conclusion that vitrified/porcelain tiles were exported by UAE and China PR to India below the "normal value", resulting in dumping, that the domestic industry had suffered material injury, and that, the injury had been caused cumulatively by the imports from the subject countries, and recommended imposition of anti-dumping duty on all imports of vitrified/porcelain tiles from these countries in order to remove the injury to the domestic industry, at the rates of US$ 8.28 per sq. mtr. in respect of exporters/producers from China PR and US$ 0.74 for M/s. RAK Ceramics of UAE, and US$ 5.54 for other exporters/producers of UAE. 1.1 An application (bearing the date 28-3-2003), came to be made for initiation for New Shipper Review by Nanhai Shanguyan Qualin Construction Ceramic Co. Ltd. (hereinafter referred to as Nanhai) producer from China PR, which was forwarded to the Designated Authority by the advocate of Nanhai under his letter dated 15-3-2003 (the application bearing the date 28-3-2003). After this application was forwarded, Customs Notification No. 73/2003, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conformity with Article 9.5 of the WTO Anti-Dumping Agreement. The designated authority after dealing with the contentions raised by the interested parties arrived at the ex factory "normal value" of the products, calculated ex-factory export price during the period of that investigation, worked out the dumping margin, and made recommendations to the effect that the export price of vitrified/porcelain tiles exported to India produced by Nanhai of China PR (now known as Foshan Qulian Construction Ceramic Ltd.) and exported from Prestige of Dubai, UAE was above its normal value during the period of investigation and therefore, no anti-dumping duty be imposed on the imports of vitrified/porcelain tiles falling under Chapter 69 of the Customs Tariff Act, 1975. By the impugned Notification No. 28/2004, dated 28-7-2004 the Central Government, in exercise of the powers conferred by sub-section (1) read with sub-section (5) of Section 9(A) of the said Act read with Rules 18, 20 and 22 of the Rules of 1995, on the basis of the said final findings of the designated authority amended the Notification No. 73/2003, dated 1-5-2003 by inserting a proviso that no anti-dumping duty shall be impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submitted that the language of Rule 22 precluded the designated authority from exercising any suo motu power. According to him, the expression "periodical review" in Rule 22, was consciously used and review undertaken just 22 days after the notification, was not a periodical review. He submitted that the words "periodical" was used in Rule 22 to mean periodic i.e. at regular time intervals. He argued that the exporter from the UAE, who never made an application under Rule 22, did not "show" that he was not related to the exporter/producer of the country of export. He submitted that power of review under Rule 22 cannot be exercised if there is no application by an appropriate person which in the present case was Prestige of Dubai and not Nanhai of China, because, Prestige of UAE Dubai had bought the goods from the producer. He also argued that physical exportation by the Dubai exporter was shown, and therefore, there was no warrant for initiating any review under Rule 22 in respect of either the exporter or the producer as none of the requirements under Rule 22 were satisfied. The learned Senior Advocate for the appellant then argued that the entire proceedings were vitiated bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a selling agent was not conclusive. (b) Hallsbury's Laws of England, Fourth Edition, Volume 1(2), wherein the decision of W.T. Lamb & Sons v. Goring Brick Co. Ltd. [1932] 1KB 710 at 717 (Court of Appeal) was cited to place reliance on the following excerpt from Para 2, Page 5 :- "In addition to meaning a person employed to create contractual relations between two parties, the word 'agent' is used in at least two other senses. Thus it is often used in business in a non-legal sense to refer to a distributor, as in the case of the appointment of a 'sole-selling agent', 'exclusive agent' or 'authorized agent'. The relation so established between the appointor and appointee is usually that of 'vendor' and purchaser and no contractual relationship is established between the appointor of the agent and third parties by the sale of goods by the so-called agent to those third parties." (c) Black's Law Dictionary defining the meaning of 'Periodic'- Recurring at fixed intervals to be made or done, or to happen at successive periods separated by determined intervals of time, periodic payments of interest on a bond or periodic alimony payments. (d) Stroud's Judicial Dictionary defining "Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designed to safeguard the interests of those who were not dumping goods in India by their exports. He submitted that during the course of the investigation under Rule 5 before the imposition of the anti-dumping duty under Section 9A(1), no Chinese exporter had co-operated and the designated authority had taken the information submitted by the domestic industry as a gospel truth. He submitted that the period under consideration for the purpose of New Shipper Review under Rule 22 was from 1-7-2002 to 30-6-2003, and the designated authority had given wide publicity by issuing a public notice to the proposed review. A large number of transactions both domestic as well as exports that had taken place during the period of investigation under review were brought to the notice of the designated authority. He submitted that the New Shippers had claimed confidentiality under Rule 7 of the said Rules by their letter dated 16-8-2003 to which they were entitled, and non-confidential version containing sufficient information was supplied to the interested parties. According to him, the designated authority rightly treated the information as confidential in consonance with the provisions of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of relationship. He contended that there were no pre-conditions under Rule 22 as were sought to be urged, and even in the absence of a formal application the designated authority can review a New Shipper's case and can give relief to an innocent "new shipper" who did not indulge in dumping. It was also contended that the expression "anti-dumping duty" in Rue 22(1) included even a provisional anti-dumping duty which could be imposed under Section 9A(2) of the said Act and therefore, the application of the New Shipper was validly made after the imposition of anti-dumping duty under Section 9A(2). The learned Counsel then argued that when an information is by law or custom treated as confidential and it is so claimed, the designated authority will be bound to treat it as such. Only when information is accessible in the public domain, it may not be treated as confidential. He finally argued that even if initiation of the review was faulty that will not vitiate the material gathered, which showed that there was no dumping done by the applicant. 5.1 In support of his submissions, the learned Counsel placed reliance on the following decisions and material :- (a) Decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings, the Authority concluded that M/s. Yusua Battery Guangdong Company Ltd. producer from China and M/s. Yusua Corporation of Japan had exported to India the product above its normal value during the period of investigation and dumping margin was de-minimis. The Authority did not, therefore, recommend anti-dumping measures as the anti-dumping margin was de-minimis. (c) CFR Title 19, Part 351.214 was cited to point out that in the context of New Shipper Review it was provided in the U.S.A. that a request for a New Shipper Review must contain a certificate that the person requesting a review did not export subject merchandise to the United States and was not affiliated with any exporter or producer. He submitted on the strength of this provision that only certification was required and the new Shipper Reviews was not required to adduce any detailed evidence about his relationship. It was sufficient for him to certify that he was not "related" to any exporter/producer within the meaning of Rule 22. (d) Referring to the replies given to the questions posed by the United States concerning the Notifications provided by the Government of India in the context of anti-dumping methodolog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign product in the domestic market place that was originally sold for export to India at the price less than the product is sold in the domestic market of the exporting country. If foreign sales for export are less than "normal value" and result in economic injury to the domestic industry, then, anti-dumping duties are assessed to level the playing field. Section 9A(1) of the Customs Tariff Act, 1975, is attracted when any article is exported from any country or territory to India at less than its 'normal value' as defined in Clause (c) of the Explanation to Section 9A(1). It fixes the upper limit of anti-dumping at the 'margin of dumping', as defined in Clause (a) of the Explanation so as to mean the difference between the export price and its normal value. 6.1 The price of the article exported to India will be considered to be the export price of that article under Clause (b) of the Explanation. It is only when, (i) there is no export price i.e. the article is not priced or, (ii) the price of the article exported is unreliable because of association or a compensatory arrangement between the exporter and the importer or the exporter and third party, that the export pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters enumerated therein. The designated authority has the power to call for any information from the exporters, foreign producers and other interested parties under sub-rule (4), which is required to be furnished by such persons within 30 days from the date of receipt of the notice. Sub-rule (7) of Rule 6 provides that the designated authority shall make available the evidence presented to it by one interested party to the other interested parties participating in the investigation. Rule 7 relates to confidential information. Since it falls for our interpretation, it is reproduced hereunder :- "7. Confidential information. - (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 12, sub-rule (4) of rule 15 and sub-rule (4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sub-rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality be treated as such by it and no such information shall be disclosed to any other party without specific authorisation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the exporters have been given opportunity to cease exporting at dumped prices to the area concerned or otherwise give an undertaking pursuant to rule 15, as provided by sub-rule (3) of Rule 18. The anti-dumping duty levied under Rules 13 and 18 takes effect from the date of its publication in the Official Gazette, as required by Rule 20. 6.6 Rule 22 relates to the power of the designated authority to carry out a review of margin of dumping for exporters not originally investigated. Since the main controversy has centred around the interpretation of Rule 22 it is reproduced below - "22. Margin of dumping, for exporters not originally investigated. - (1) If a product is subject to anti-dumping duties, the designated authority shall carry out a periodical review for the purpose of determining individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation provided that these exporters or producers show that they are not related to any of the exporters or producers in the exporting country who are subject to the anti-dumping duties on the product. (emphasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), therefore operates when the product is already subjected to anti-dumping duty under Rule 18 and the exporters/producers in the exporting country are already subjected to anti-dumping duty on the product. 7.1 The anti-dumping duty levied under Rule 13 (provisional) and Rule 18 takes effect from the date of publication. The imposition of provisional duty is anterior to and distinct from the anti-dumping duty properly so-called. During the currency of provisional duty there cannot arise any question of exercising the power of review which comes into play only when the product is subjected to anti-dumping duty. We consider that the term "provisional duty" is consistently used where the intention is to refer to the measures imposed before the end of the investigation process. In our view, the rules which are in conformity with the Anti-Dumping Agreement clearly distinguish between provisional measures and anti-dumping duties which term consistently refers to definitive measures. Thus, in our view, the meaning of the expression "anti-dumping duties" in Rule 22 is clear, it refers to the imposition of definitive anti-dumping measures at the end of the investigative process and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under Rule 22 is made, would not be judged by reference to the date of the notification imposing the anti-dumping duty for contending that the application is made rather too soon to make a periodical review possible. In a periodic review the designated authority has to review the situation in the context of the exporters and producers who were not in picture during the period of investigation under Rule 5 relatable to the notification under Section 9A(1) but have entered the field later. Such review may lead to determination of different margins of dumping in respect of exporters and importers under review, if the investigation so warrants. 7.4 The words "periodical review" in Rule 22(1) have to be viewed in the context of the words "provided that these exporters or producers show….", and the nature of review which is confined to determining individual margins. Therefore, the review power is initiated to relieve the new exporters who may not in fact be dumping the product that is already subject to the anti-dumping duty which applied even in cases where the exporter/producer did not dump the product in the Indian market. The periodicity of review under Rule 22 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant-exporter/producer is not so "related". The designated authority should be conscious of the possibility of the abuse of the "New Shipper" rules. An exporter subject to a high-dumping duty may set up a new "shell" company in the exporting country to act as a 'new shipper', and in some cases, also a "shell" company in India to act an importer. Such new shipper may, by moving an application under Rule 22 request the designated authority to undertake a 'New Shipper Review' of its export sales price after shipping a few orders to Indian market as a new shipper. The undertaking of such review under Rule 22 would qualify the importer for the privilege of being subjected to provisional duty and a guarantee under the proviso to Rule 22(2), in lieu of making a cash- deposit of high anti-dumping duty rate. This privilege continues while the detailed investigation proceeds. In the interim period, such "new shipper" may then ship a large volume of product. At the same time, other shippers may attempt to counterfeit the new shipper's identity by submitting counterfeit invoices in order to take advantage of the privileges under the proviso to Rule 22(2). While the investigation under Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not. 7.7 The learned Senior Advocate for the appellant argued that the real exporter was Prestige of Dubai, UAE to whom porcelain tiles were to be sold under the purchase order by Nanhai for export from China to the importer in India. Therefore, it was necessary for the purpose of Rule 22 for the designated authority to determine whether the UAE exporter Prestige was related to any producer/exporter in the country of export. He submitted that the real exporter was Prestige of UAE because the goods were to be sold to it under the purchase order. 7.8 There appears to be no prior decision taken by the designated authority under Rule 22 before initiating the review by issuance of the public notice dated 23-5-2003. In the said notice, it is made clear at the outset, while describing the "subject" of the notice, that the review was initiated at the instance of the producer, Nanhai of China and the exporter, Prestige of Dubai. The period of review was 1-7-2002 to 30-6-2003. In Paragraph 4 of the notice it is stated :- "EXPORTER INVOLVED 4. The present investigations relate to exports of Vitrified/Porcelain Tiles M/s. Nanhai Shangyuan Qulian Construction Ceramics Co. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, even if the designated authority has initiated the review application on the basis of the application dated 15-3-2003 of the producer, Nanhai, the review proceedings will not be vitiated on the ground that the initiation was bad as the review application was made before the issuance of the Notification Nos. 73/2003, dated 1-5-2003 imposing anti-dumping duty under Section 9A(1). The contention that review proceedings were void ab initio is, therefore, misconceived. 8. The contention that the words 'periodic review' in Rule 22 precluded consideration of the application of Nanhai of a review within 22 days of the notification under Section 9A(1) of the Act is equally misconceived for the simple reason that the word "periodical" which is used in the sense of periodic (and not journal or magazine as per its common parlance) only the means, in the context of the provisions of Rule 22, that the review can be undertaken intermittently. There are no time intervals intended by this expression and it only means that as and when the occasion arises to determine the individual margins, the designated authority may intermittently undertake a review. The review for determining indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hippers were not related as the authority "did not find any evidence of relationship", shows that the authority was oblivious of the importance of the anti-circumvention aspect that is ingrained in Rule 22 when it requires the designated authority to exercise the review power only when it is "shown" that the "new shipper" is not so "related". The domestic industry, however, has not been able to assail this finding by reference to any cogent material on record. In our view, notwithstanding that no prior determination was made on the relationship aspect before initiating the review under Rule 22, the new shipper could have shown at any stage of the review proceedings that no inhibiting relationship existed and it was equally open for the domestic industry to show, it did exist. No such fresh exercise is called for at this appellate stage in the facts of the case, nor is it attempted with any seriousness. The material gathered during the review proceedings continues to be validly collected for the purpose of all determinations, and the proceedings, in our view, are not void ab initio, as was sought to be contended on behalf of the appellant. 10. It was contended by the learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , its disclosure is not treated as confidential, either under the law or by custom, usage or practice of the trade or industry, then the claim to confidentiality is ill founded and will not be accepted by the designated authority. However, in the areas where confidentiality of information, having regard to its nature and content, is accepted by law, custom, usage or practice, (e.g. about "know how" as in the field of intellectual property), the designated authority will be satisfied about the confidentiality. Confidentiality, however, is not a mere tool to deny disclosure of information provided during investigation in order to kill all transparency provisions of the rules and create a handicap for the opposing parties. Any claim to treat the information as confidential must be bona fide and germane to the rights and legitimate interests of the party wanting to treat the information it provided as confidential. 10.2 If on consideration of the relevant factors having bearing on the aspect whether the information ought to be treated as confidential, the designated authority reaches satisfaction about its confidentiality then, and then alone, the embargo against disclosure will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. This is an important element incorporated in Rule 7(2) which reflects the balance struck by the rules between the need to protect the confidentiality of certain information, on the one hand, and the need to ensure that all parties have a full opportunity to defend their interests, on the other. The transparency required under the rules which obligates the authority to explain its determination in a public notice is subject to the need to have regard to the requirement for the protection of confidential information under Rule 7. Confidentiality of the information limits the manner in which the authority explains and supports its determinations in a public notice. Therefore, the designated authority may rely on confidential information in making determinations while respecting its obligation to protect the confidentiality of that information. 11. In the present case, the designated authority has not even cared to pass any formal order in the matter of confidentiality and has merely accepted the version of the parties providing evidence without applying his min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement on Trade & Tariffs :- "Article 13 - Judicial Review - Each Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews and determinations within the meaning of the Article 11. Such Tribunals or procedures shall be independent of the authorities responsible for the determination or review in question." (emphasis added) This Tribunal is statutorily constituted under Section 129 of the Customs Act with appellate jurisdiction under Section 129A. Under sub-section (6) of Section 129C the Tribunal has power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions. Therefore, the Tribunal and its procedures are independent of the authorities responsible for final determinations for judicial review in question, as contemplated by the above Article 13. In fact, the Union of India or the concerned Ministry would be a party in the proceedings before the Tribunal, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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